Meridian Interests, Inc. v. J.A. Peterson Enterprises, Inc.

• Decision Date: 30 April 1985
• Docket Number: No. WD,WD
• Citation: 693 S.W.2d 179
• Parties: MERIDIAN INTERESTS, INC., d/b/a Meridian Properties, v. J.A. PETERSON ENTERPRISES, INC., Appellant. 35444.
• Court: Missouri Court of Appeals

Page 179

693 S.W.2d 179

MERIDIAN INTERESTS, INC., d/b/a Meridian Properties, v. J.A. PETERSON ENTERPRISES, INC., Appellant.

No. WD 35444.

Missouri Court of Appeals,

Western District.

April 30, 1985.

Motion for Rehearing and/or Transfer

to Supreme Court Overruled and

Denied July 2, 1985.

Application to Transfer

Denied Aug. 7, 1985.

William E. Simmons, Kansas City, for appellant.

Joseph W. Amick, Kansas City, for respondent.

Before LOWENSTEIN, P.J., and SOMERVILLE and NUGENT, JJ.

NUGENT, Judge.

Defendant appeals from a verdict and judgment awarding plaintiff its broker's commission for procuring a ready, willing, and able buyer for a Kansas City apartment building, the sale of which was not completed. Defendant complains that the evidence was insufficient to submit the case to the jury and that the court erred in instructing the jury. We affirm.

Defendant, J.A. Peterson, Inc., is owned by Gordon Peterson. In 1977-78, defendant was having a cash flow problem and its creditors were pressuring Mr. Peterson to sell some of the company's properties.

On May 17, 1978, Peterson hired plaintiff Meridian Enterprises to act as broker in the sale of the Cherokee Village Apartments. The parties entered into a written exclusive listing agreement which in pertinent part provides as follows:

In consideration of the services of Meridian Properties, hereinafter called Broker, I hereby list with said broker, exclusively, for a period of 30 days from date hereof, the following described property and at the following price and terms:

Name: Cherokee Village Apartments

Address: 1207 Cherokee Drive, Liberty, Missouri

Selling Price: $1,400,000.

Mortgage: $1,050,000. 8 1/2% 40 year balloon in 7 years

Cash Down: $350,000.

I hereby agree to pay said broker as commission ($50,000) (3 1/2%) of the selling price should, during the time set forth herein, said property be sold by said broker or by another broker, at the above price and terms agreeable to me.

....

At the time of this controversy, Peterson Enterprises did not have legal title to the property but was in possession under a contract for deed. To obtain title, defendant had to pay an additional $88,000 to its seller. The defendant had also assumed four mortgages on the property containing acceleration and due-on-sale clauses.

Meridian was able to procure two prospective purchasers of the complex, James Polsinelli and John Gramlich. By letter dated June 7, 1978, the broker requested that Peterson list them as prospective buyers. On June 8, 1978, the purchasers made the following written offer:

Please consider this letter as our offer to purchase the Cherokee Village Apartments in Liberty, Missouri under the following terms and conditions:

....

2. The purchase price is $1,400,000.00. A total down payment in the sum of $350,000.00, with $200,000.00 to be paid at the date of closing and the remaining $150,000.00 payable on or before (date of closing). The $150,000.00 carry back shall be secured by a deed of trust in a form acceptable to Seller and shall be carried back at a 10 1/2% interest rate, payable interest only for the year with a single payment, principal and interest due upon maturity. The remainder of the purchase price consisting of $150,000.00 shall be carried back by the Seller with an all-inclusive non-recourse deed of trust providing for annual payments of $90,200.00 per year and the beneficiaries equity in said all-inclusive deed of trust shall balloon on July 1, 1983. The $150,000.00 carry back shall be personally guaranteed by the principals.

....

4. The sales contract shall contain the standard pro-rations for taxes, utilities, maintenance expenses and rents and security deposits shall be delivered to Buyer at closing.

5. Seller to furnish Buyer a title policy insuring merchantable title in the property.

6. Upon execution of this offer by both parties, the parties shall proceed to draw a formal contract which shall be executed no later than June 23, 1978 and contain the usual contract clauses and exhibits for the note and deed of trust to be executed by the purchasers.

If the above is acceptable, would you please execute where indicated and we will proceed to have this matter handled as expeditiously as possible.

Mr. Peterson on behalf of Peterson Enterprises signed the letter, accepting the offer. Mr. Peterson admitted at trial that he had agreed to the above terms and that they were the material terms of the sale.

Mr. Polsinelli and Mr. Gramlich then submitted to Mr. Peterson a long form sales contract which defendant found unacceptable. The contract varied in two respects from the June 8th offer: first, the rate of interest on the note was to be 8% instead of 8 1/2%, and second, the balloon was deflated from seven years to five years. Mr. Peterson admitted at trial that he agreed to the above changes. The main stumbling block was that the Polsinelli contract would have made defendant responsible for the call clauses in the mortgages it had assumed. Mr. Peterson admitted that he did not consider this possibility before accepting the letter offer of June 8. He further testified that his objections to the Polsinelli contract were that it did not provide a place for the wives to sign the note and contract and that he was not sure Peterson, Inc., owned the property since it had only a contract for deed. The parties agreed to have Mr. Peterson's attorney, Kent Perry, draw up a proposed sale contract and submit it to the purchasers.

Mr. Perry's proposed contract provided for an increased $250,000 cash down payment at closing with a $100,000 carry back secured by a letter of credit and payable in one year. Mr. Perry also drafted a proposed note and deeds of trust none of which provided spaces for the signatures of the buyers' spouses.

On the basis of the seller's proposed contract, the parties continued their negotiations. Mr. Peterson testified that a major problem in the negotiations was that Mr. Gramlich was having marital difficulties which might have prevented his wife from signing the note and contract. Several means of overcoming this difficulty were proposed, but no action was taken and the parties were never able to reach final agreement. The evidence conflicted as to how the negotiations ended. Mr. Polsinelli testified that he and Mr. Gramlich were ready to accept the seller's contract, but before they were able to do so the property was removed from the market. He conceded that their intention to sign was not communicated to Peterson but said the reason for that was that Mr. Peterson took the property off the market. Mr. Peterson testified that he withdrew the property because it was unsaleable. In contrast, Mr. Polsinelli testified that he had inspected the property and believed that it was suitable for sale.

The negotiations continued for over four months. During that time, Mr. Peterson was able to sell other property, thereby relieving his company of its immediate financial problems.

When defendant refused to pay its $50,000 commission, Meridian filed suit for breach of contract. The case was tried to a jury, defendant's motions for directed verdict at the close of plaintiff's case and at the close of all the evidence were denied. The trial judge gave plaintiff's verdict director instruction number six based on M.A.I. 29.01. The jury returned a verdict in favor of plaintiff. The court denied defendant's motion for judgment notwithstanding the verdict or in the alternative a new trial.

Defendant raises two points on appeal: first, that plaintiff did not adduce sufficient evidence that it had produced a ready, willing and able buyer to justify submitting plaintiff's case to the jury; second, that the court erred in giving instruction number six because it included only the sale price and omitted other terms of purchase that were in issue.

I.

Defendant's first point challenges the court's denial of its motion for a directed verdict at the close of all the evidence. The trial court can only direct a verdict in favor of a defendant where the evidence and inferences drawn from it are so strongly against the plaintiff that no room remains for reasonable minds to differ on the disposition of the case in favor of the defendant. Martin v. Brune, 631 S.W.2d 77, 79-80 (Mo.App.1982); Carter v. Boys' Club of Greater Kansas City, 552 S.W.2d 327, 328 (Mo.App.1977). In determining the submissibility of a case, we must consider the evidence in the light most favorable to the plaintiff, accord it all reasonable inferences, and disregard defendant's evidence except as it may add to plaintiff's case. Id.; Dudley v. Dumont, 526 S.W.2d 839, 843 (Mo.App.1975).

The general rule is that a broker earns his commission when he produces a buyer ready, willing and able to buy on terms specified by the seller, whether or not the sale is completed. Marrs v. Twitty, 635 S.W.2d 374, 376 (Mo.App.1982); E.A. Mabes and Co. v. Fishman, 284 S.W.2d 21, 26 (Mo.App.1955). A seller and his broker may by express contract condition payment of the broker's commission upon the occurrence of certain events, contingencies or conditions precedent. Clarkson v. Standard...